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BIS and Bank of England complete CBDC project

A pilot project involving central bank digital currencies (CBDCs) jointly run by the Bank of England (BoE) and the Bank of International Settlements (BIS).

Project Rosalind was designed to explore how a "universal and extensible API layer" could connect central bank and private sector infrastructures and enable retail CBDC payments.

The project also sought to develop a number of retial CBDC use cases.

According to the BIS and BoE, the project has successfully demonstrated that"a well designed API layer could work with different private sector applications and central bank ledger designs and that a set of simple and standardised API functionalities could support a diverse range of use cases".

In all, the project led to the development of 33 API functionalities and examined 30 retail CBDC cases including peer-to-peer transfers, retail payments for goods and services and small-value business transactions.

"Active collaboration with the public and private sectors to identify and explore these use cases has been at the heart of this," said Francesca Hopwood Road, Head of the BIS Innovation Hub London Centre. "We believe that Rosalind can make a significant contribution to how organisations across the globe are thinking about and engaging with the design of retail CBDC systems."

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Editorial | what does this mean?

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

Comments: (1)

A Finextra member 16 June, 2023, 13:32

1 like

It is clear that the BIS is the driving force behind the proliferation of CBDC projects at central banks around the world. The BIS intention is clear, as stated in a speech by the general manager two years ago:

"A key difference with a CBDC (to cash) is that the central bank will have absolute control on the rules and regulations that determine the use of that expression of central bank liability. And also, we will have the technology to enforce that."

It is unclear how this fits in with the BIS mission to 'support central banks' pursuit of monetary and financial stability through international cooperation, and to act as a bank for central banks.'

With CBDCs central banks are straying outside settlement of wholesale payments and into retail payments where they have no expertise and no remit (generally) to operate.

The risks are mounting that CBDCs will become a fait-accomplit without the consent in national populaces, or even awareness, for their money usage to be subject to rules and regulations under the the 'absolute control' of unelected, obscure entities such as the BIS and the central banks it influences.

Projects such as Rosalind are no doubt well-intentioned by those running them but there are some big risks and issues - surveillance, privacy, freedom to name a few that need to be addressed and resolved before central banks are allowed to issue CBDCs or even continue these projects (justified as 'responsible innovation' a somewhat uneasy phrase used by the BIS).

Rosalind is a likeable but manipulative scheming Shakespeare character (As you Like It). What comes next - Project Ganymede (something in disguise such as carbon credits) then Project Orlando (a marriage such as CBDC plus digital id)?

The risks are very high.